AUSTIN - Public pensions in Texas are in fair financial shape, but the state still faces a massive bill to cover health care costs and other retirement benefits for state employees and public school workers, according to a report released Tuesday by the Pew Center on the States.

Texas has about 89 cents of every dollar needed for the pension benefits promised to state employees and teachers over the next 30 years, according to the report, part of a new project on state pensions and investments. Nationally, public pensions have 85 cents of every dollar needed.

Pension experts consider a funded ratio of 80 percent or higher to be healthy, the report said.

Despite the condition of public pension funding, the state faces a $36.8 billion unfunded liability in providing health care and other benefits to current and future retirees.

The report said the five largest states — California, Texas, New York, Florida and Illinois — have set aside no money to pay for health insurance and other retiree benefits. New York figures show it owes an estimated $50 billion, while California owes about $48 billion.

“States’ fiscal health and economic vitality depends greatly on their ability to wisely manage these bills coming due,” said Susan Urahn, managing director of the Pew Center on the States.

Texas, like most states, handles retiree benefits on a pay-as-it-goes-basis rather than setting aside money to decrease the unfunded liability.

Urahn said in the past year, 13 states have established trusts for themselves or local governments to help pay for nonpension benefits.

Information from the Austin American-Statesman:

Judge denies temporary block of $5 strip club fee


Associated Press Writer

AUSTIN - A judge denied a request Tuesday from owners of nude entertainment clubs to temporarily block Texas’ upcoming $5-per-person strip club fee from taking effect.

Judge Scott Jenkins said he was not persuaded that there was “imminent irreparable harm,” so he denied a temporary injunction request made by the Texas Entertainment Association and Karpod, Inc., owner of an Amarillo club.

Jenkins said he would rule on a future date on the state’s motions to dismiss the clubs’ lawsuit over the new fee. If he doesn’t dismiss the case, it could proceed to trial.

The $5 charge goes into effect Jan. 1. The clubs’ first payments to the state are to be made in April.

“The injury is going to start on Jan. 1. It’s not just likely, it’s going to happen,” plantiffs’ attorney Stewart Whitehead told the judge. He and other lawyers for the plaintiff said the fee amounted to an unfair tax and that it violates constitutional rights to free expression.

State attorneys said the $5 per customer surcharge will be fairly imposed “on a level playing field” to all nude entertainment clubs and won’t violate First Amendment rights.

The clubs’ association sued Texas Attorney General Greg Abbott and Comptroller Susan Combs earlier this month.

The new fee, approved this year by the Texas Legislature, is projected to raise some $44 million for sexual assault prevention programs and health care for the uninsured. The state’s attorneys tried to suggest through questioning of their witnesses that there are links between sexually oriented businesses and sexual assaults.

Chandra Brown, president of Karpod, which owns Players’ night club in Amarillo, testified her club would go out of business if it has to collect an additional $5-per-patron charge.

“They won’t pay it. They won’t come in,” she said. “They can’t afford it.”

Currently the club charges a $4 cover charge, she said, noting that when it tried to increase the admission fee to $5 per person it lost business.

Scott Burch, president of the Texas Entertainment Association, who called the clubs “adult cabarets,” testified that customers will go elsewhere if nude entertainment clubs charge too much admission.

“You can only charge so much to the customer before they will go bowling, Bennigans, X, Y, Z,” he said.

In a brief filed by the state, on behalf of Abbott and Combs, attorneys argued that the fee “does not prohibit nude dancing, does not dictate where live nude entertainment may be presented, does not require any minimum clothing and does not govern the physical setting for the activity.”